(Reuters) -Rainbow Chicken on Friday said half-year profit surged more than 14 times as the firm recovered from South Africa’s worst outbreak of bird flu, though it flagged the possibility of another flare-up due to a sluggish a vaccination campaign.
South Africa lost a third of its national chicken flock in 2023 to an outbreak of high-pathogenic avian influenza (HPAI), a bird flu with a high death rate that spreads rapidly.
In recent years, the viral disease has ravaged poultry flocks worldwide, including in France and the U.S., killing millions of chickens and ducks and driving up egg prices.
South Africa’s poultry sector recovered in 2024. Still, participants are guarding against a repeat as a government-approved vaccination programme struggles for momentum due to what they say are costly monitoring and testing requirements.
The South African Poultry Association wants the government to subsidise vaccinations and compensate farmers for losses incurred during the last bird flu outbreak.
“The threat of Avian Influenza during the winter months is real,” Rainbow said in its financial results statement.
“South Africa is yet to find an optimal response to this threat with specific reference to compensation and vaccination strategy,” the poultry products producer said.
Rainbow posted 317.6 million rand ($17.51 million) in headline earnings for the six months through December 2024, compared to 21.9 million rand during the same period in 2023.
It skipped paying a dividend in favour of investing available free cash flow in expanding its infrastructure as it works to become a market-leading, low-cost producer.
The company, which produces poultry products under the Rainbow, Simply Chicken and Farmer Brown brands, was split off from RCL Foods and listed separately in June.
($1 = 18.1368 rand)
(Reporting by Nelson Banya; Editing by Tom Hogue and Christopher Cushing)
